AUSTRALIAN MARKETS.

New Zealand Herald, Volume LXVII, Issue 20517, 19 March 1930, Page 11

AUSTRALIAN MARKETS.

SUCCESS OF. LOCAL LOAM. OVERSEAS INVESTMENTS. SYDNEY LOAN IN NEW YORK# [from our own correspondent.] MELBOURNE, March 12. Tho over-subscription and withdrawal of the Commonwealth conversion loan, coupled with heavy conversions of over £20,000,000 of the December issue, and the announcement that the £3,000,000 cash over-subscribed for the March conversion is to be used for immediate redemption of the December issue, have been immediately reflected in the market for Commonwealth bonds. This, coupled with the buying by.overseas firms and companies, which are unable to withdraw their funds except at very expensive rates of exchange, has resulted in a distinct firming for those loans with, matur--ity elates in the next five years. On' the other hand, tho longer-term loans have continued weak. The average return over the Commonwealth bond market is now £6 3-5 5d per cent., compared with £6 4s 2d per cent, a week ago. The share market has" continued quiet, but apart from a few individual fluctuations, there is no sign of strength. Large Distribution of Cash.

The final figures of the conversion loan aro particularly satisfactory. Repayment to those holders of the maturing loan who did not convert will total nearly .£5,000,000, while £3,000,000 cash oversubscribed is to bo returned to the market 'by redemption of the December loan. On fja.turday next fixed interest payments on Commonwealth bonds will be made totalling about £1,250,000, while threfii months' interest is also bo paid to those holders oE tho December loan who havft convo;rted into the new issue. This will enta.l distribution of £300,000 or so. Tho bulk of this money probably is already hypothecated, but its release cannot but have a beneficial effect on general conditionii, although this probably will only prove temporary. The reduction in tho London bank rate to per cent, has had little influence on Australian markets, although it is a reflex of the lower English interest rates that one overseas insurance company remitted £IO,OOO tor Australia for investmehii in tho Commonwealth loan which just closed, in order to take advantage of tho exchange premium obtainable. It is understood that -"-other overseas companies have been adopting the same course, thereby obtaining the new issuft at a substantia] discount (after allowing for exchange received) and obtaining a very satisfactory rate of return. Thei difficulty of supplying exchange may put a definite' check on Australian tourists going sibroad, which may mean that this money normally taken out of tho country will be kept here. Private Exchange at 6 Per Cent.

The official increase in the bank charge for telegraphic transfers on London to B?.s 6£ was by no means unexpected, buli there are still private deals outsida tho bank!i at 6 per cent., and it would appear that there is a distinct possibility of an even further increase in the exchange rate. The City of Sydney loan, which was arranged in New York with the Ban-camerica-Blair and other interests by Messrs. J. B. Were and Son, o! Melbourne, was for 5,000,000 dollars, with an option to the lenders over a further suni of 5,000,000 dollars. The rate of interest was per cent, j the issue price was 90 per cent., with a currency of 25 years, with an option to the city of repayment after 15 years. The return at : ihe issue price was £6 6s 2d per cent. Tho first 5,000,000 dollars of stock was offered in New York last Friday and lirnvily over-subscribed. Since then the lenders have exercised their option to r.alr« up 3,000,000 dollars of the loan, making a total issue of 8,000,000 dollars. OPERATIONS OF " BEARS." DEILAY IN DELIVERY OF SCRIP ACTION BY STOCK EXCHANGE. [from ode own correspondent.] SYDNEY, March 13. Now Zealand's interest in the opera- • tions; of."bears" on the Sydney Stock Exchange has been mado apparent this week by the protest received from the chairman of the Auckland Stock Exchange against the delay in the delivery of scrip that has been purchased by New Zealanders. New Zealanders were quick to realise the favourable opportunity for general investment, and it is estimated that thousands of pounds have been sent across the Tasinan for the purchase <of shares that have been quoted far below their actual market value; For the time being Australians seem to have lost confidence in their own coun-

try, though financial experts have insisted that the position is quite sound, even though a little delicate. It has been shown that the prices of stocks have forced down as the result of artificial movements. This to a large extent has made the small investor panicky. Shares liavo benfc rushed on to a falling market by 'those who did not stop to consider actual values. The wise heads have rushed into purchase, and to a large extent the "bears" have now received a setback, and are faced with the prospect of losses, for the market is rising. The "bears" are still pressing for lower prices and this is why there has besn some late delivery of certain ' stoclra. Still, the question has arisen whether the class of forward trading, which is now within the law, should be permitted, and has received suoh prominence that Government action has been demanded and may be taken. Seldom has the investment sharemarket been so heairily over-sold as it is at the present time. Demands for the delivery of scrip are now general, and they are not confined to New Zealand. The position from the point of view of the "bears" is likely to become much worse during the next 1 few weeks. .A meeting of members of the Sydney Stock Exchange to-day decided to grant the committee increased power to regulate time bargains in the event of' such a course being deemed necessary.